6 March 2015

Ed Miliband is an enemy of free markets


The British are not used to long election campaigns, and a lot of voters are already bored by the current one, which still has two months to run. But that is not a sensible response. Vital economic questions are in play, and so is the entire future of the Labour party. This election is the latest, and crucial, phase in the long schizoid conflict which has characterised Labour’s history.

On much of the continent, Marxist intellectuals played an important, almost decisive, role in the creation of Labour movements: their political parties and their trade unions. In England, Methodism was more important than Marxism. The early Labour movement owed far more to Christian socialism and the hardships experienced by the workers in industrial areas than it did to the lucubrations of Left-wing intellectuals. Moreover, there was always a split – as much temperamental as intellectual – between those who looked to the Soviet model, dramatic revolutionary transformation, and those who believed that there could be a Parliamentary route to socialism.

For some decades, there seemed to be the possibility of a compromise: Fabianism. The Fabian socialists took their name from the Roman general Quintus Fabius, who was nicknamed Cunctator, the delayer, because he refused to be drawn into an early battle with Hannibal. He was not willing to fight until he was sure that he could win. The British Fabians insisted that there was no need for violence and revolution. They proclaimed the inevitability of gradualness. Year on year, the state would own a higher proportion of the nation’s wealth, spend a larger proportion of its income and regulate more and more of its activities. End result: bloodless socialism.

But a lot of left-wingers were suspicious. They doubted the Fabians’ good faith; they wondered whether the gradualists really were committed to socialism. Nationalisation became the battle-ground. Irrespective of the economic arguments for nationalisation – not that there ever were any good ones – it became a defining test. If you were a socialist, you had a long shopping-list of companies to be nationalised. If you were reluctant to nationalise, you could not be a proper socialist.

This dispute damaged Labour’s electoral prospects, It was easy for Tories to claim that Labour would nationalise the corner-shop while taxing the middle class out of existence to pay for it. Labour’s most important post-war intellectual tried to find a way through the problem. In The Future of Socialism, Tony Crosland argued that there was no need for an extensive programme of nationalisation. Left largely to itself, the private sector would produce the wealth which could then be taxed to pay for higher public spending. In an era where tax rates were high even under Tory governments, this could have been the basis for an appealing electoral programme. But the Left was still unhappy.

Then came Margaret Thatcher, and the entire political debate swung to the Right. By the late Eighties, British socialism was moribund and the Labour party’s very existence was threatened. The new Social Democratic Party came close to displacing it. Around 1985, a number of shrewd Labour commentators realised that they had a choice: socialism or electability. By the end of the decade, it seemed that they might end up with neither. Then came Tony Blair and Peter Mandelson.

By the time they took over the Labour party, renaming it New Labour, the SDP was dead. They made sure that it could never revive, by adopting many of its stances. Their ambition was to remodel Labour as the British equivalent of the US Democratic party: Bill Clinton without the interns. Later on, Mr Blair went even further, by adopting George Bush’s foreign policy. For New Labour, read neo-Conservative.

But the whole Blairite experiment resembled radical and ultimately unviable transplant surgery. However strong the dosage of immuno-suppressant drugs, the Labour body’s rejection mechanisms fought back. Margaret Thatcher won three elections and reshaped British politics. She is part of the Tory pantheon, now and forever. Tony Blair won three elections and seemed to have transformed British politics. Yet much of the Labour party would like to write him out of history.

Enter Ed Miliband. By 2010, there was a new version of Labour’s long split. The Blairites could almost be described as neo-Croslandites. Leave business alone. Ensure that the tax regime is not too unfavourable. As a result, there will be wealth creation to finance higher public spending without higher rates of income tax. As a result of that, Labour should be able to appeal to middle-class voters.

Then there were the Brownites. Gordon Brown did not throw over all of Tony Blair’s economic policies. He too wanted middle-class votes. But his political body language was entirely different. Emotionally, he was an old-fashioned socialist, and it showed. Blair versus Brown: although the division between the two men was exacerbated by Mr Brown’s insensate ambition to be Prime Minister, it was also ideological, and it still continues among their supporters.

After Labour’s defeat in 2010, its first expression was fratricide: the most famous brother versus brother conflict since Cain and Abel. David and Ed Miliband had been brought up in a Marxist household. Their father, Ralph, was an unrepentant communist. But David moved to the centre. He became a Blairite. Ed, a Brownite, stayed to the Left. To the thinly disguised horror of the Blairite wing, the Labour party chose the younger brother.

Ed Miliband has many political problems. He is not a natural communicator and often gives the impression that he is a weak leader (this is reinforced by the regular confusion and feuding in his own office). But many of his difficulties have a simple origin. He is a man who is not good at being insincere. Ed Miliband believes that socialism is morally right: other political beliefs, morally illegitimate. Marx argued that capitalism would produce immiserisation, dragging the great mass of the population down into poverty. The economic and social history of the advanced world over the past century and a half might seem to be a conclusive refutation of all that, but many socialists cling to the faith. In his soul, Ed Miliband is one of them. He is not going to announce this as part of his election campaign, but he does believe that much of the middle class ought to identify with the poor, not the well-off.

Equally, he is not going to propose higher taxes for the majority of the population and will insist that his social programmes could all be funded by raids on the very rich. But again, it will come down to body language. Ed Miliband does not like free markets, or the people who make them happen. He seems to assume that only the rich will notice his distaste. He does not realise that tens of millions of people with jobs, mortgages, savings and aspirations understand that their prosperity depends on the market economy. The Tories will be offering hope. He will counter that with envy. Envy versus hope does not sound like a winning strategy.

Assuming that Red Ed does lose, there will be an immediate Blairite counter-attack under the banner of ‘we told you so’. As the socialists would not surrender easily, expect a long period of strife, as the two wings of this schizoid party struggle for mastery.

Bruce Anderson is a political commentator.